Calcutta, Aug. 29: The government today handed its 72 per cent stake in Jessop & Co to the Ruia group, which had paid Rs 18.18 crore for this chunk of shares. This is the first disinvestment of a company under the Board of Industrial and Financial Reconstruction (BIFR).
A consortium of the Ruia group of companies had earlier been accepted as a strategic partner of the government in reviving Jessop after it emerged as the highest bidder for the government’s stake in the company.
Bharat Bhari Udyog Nigam, a government enterprise and the holding company of Jessop earlier, will continue to hold 27 per cent in the firm. A small percentage of shares will be with institutions and individuals.
The government has announced a BIFR-approved revival package for Jessop. The Ruia group has been entrusted with the responsibility of implementation of the scheme.
A prolonged litigation followed the emergence of the Ruia group as the highest bidder on February 27, 2002. However, on July 8, 2003, a division bench of the Calcutta High Court cleared the disinvestment case. The Supreme Court has declined to grant a stay on the process of disinvestment in Jessop.
Jessop manufactures EMU coaches, wagons, cranes, container-handling equipment and machinery for road construction, paper and mining industry at its Dum Dum factory with a workforce of around 1,400.
P. K. Ruia, chairman of the Ruia group of companies, said, “I envisage that a complete turnaround of Jessop will be carried out by its employees under the leadership of professional managers.”